IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9915 OF 2010 [Arising out of SLP(C) No.4785/2009]

STATE OF MADHYA PRADESH & ANR. … APPELLANTS

Vs.

KASHIRAM (DEAD) BY LR. GOPILAL … RESPONDENT

WITH  

CIVIL APPEAL NO.9916 OF 2010 [@ SLP(C) NO. 4786 of 2009]  CIVIL APPEAL  NO.9917 OF  2010  [@ SLP(C)  NO. 4787 of 2009] CIVIL APPEAL NO.9918 OF 2010 [@ SLP(C) NO. 4788 of 2009]  CIVIL APPEAL NO.9919 OF 2010 [@ SLP(C) NO. 4789 of 2009]  CIVIL APPEAL NO.9920 OF 2010 [@ SLP(C) NO. 4790 of 2009]  CIVIL APPEAL NO.9921 OF 2010 [@ SLP(C) NO. 4792 of 2009]  CIVIL APPEAL NO.9922 OF 2010 [@ SLP(C) NO. 4793 of 2009]  CIVIL APPEAL NO.9923 OF 2010 [@ SLP(C) NO. 4795 of 2009]  CIVIL APPEAL NO.9924 OF 2010 [@ SLP(C) NO. 4798 of 2009]  CIVIL APPEAL NO.9925 OF 2010 [@ SLP(C) NO. 4799 of 2009]  CIVIL APPEAL NO.9926 OF 2010 [@ SLP(C) NO. 4800 of 2009]  CIVIL APPEAL NO.9927 OF 2010 [@ SLP(C) NO. 4801 of 2009]  CIVIL APPEAL NO.9928 OF 2010 [@ SLP(C) NO. 4802 of 2009]  CIVIL APPEAL NO.9929 OF 2010 [@ SLP(C) NO. 4803 of 2009]  CIVIL APPEAL NO.9930 OF 2010 [@ SLP(C) NO. 4804 of 2009]  CIVIL APPEAL NO.9931 OF 2010 [@ SLP(C) NO. 4805 of 2009]  CIVIL APPEAL NO.9932 OF 2010 [@ SLP(C) NO. 4806 of 2009]  CIVIL APPEAL NO.9933 OF 2010 [@ SLP(C) NO. 4807 of 2009]  CIVIL APPEAL NO.9934 OF 2010 [@ SLP(C) NO. 4808 of 2009]  CIVIL APPEAL NO.9935 OF 2010 [@ SLP(C) NO. 4809 of 2009]  CIVIL APPEAL NO.9936 OF 2010 [@ SLP(C) NO. 4810 of 2009]  CIVIL APPEAL NO.9937 OF 2010 [@ SLP(C) NO. 4811 of 2009]  CIVIL APPEAL NO.9938 OF 2010 [@ SLP(C) NO. 4812 of 2009]  CIVIL APPEAL NO.9939 OF 2010 [@ SLP(C) NO. 4813 of 2009]  CIVIL APPEAL NO.9940 OF 2010 [@ SLP(C) NO. 4815 of 2009]  CIVIL APPEAL NO.9941 OF 2010 [@ SLP(C) NO. 4816 of 2009]  CIVIL APPEAL NO.9942 OF 2010 [@ SLP(C) NO. 4817 of 2009]  CIVIL APPEAL NO.9943 OF 2010 [@ SLP(C) NO. 4818 of 2009]  CIVIL APPEAL NO.9944 OF 2010 [@ SLP(C) NO. 4819 of 2009]

CIVIL APPEAL NO.9945 OF 2010 [@ SLP(C) NO. 4820 of 2009]  CIVIL APPEAL NO.9946 OF 2010 [@ SLP(C) NO. 4821 of 2009]  CIVIL APPEAL NO.9947 OF 2010 [@ SLP(C) NO. 4822 of 2009]  CIVIL APPEAL NO.9948 OF 2010 [@ SLP(C) NO. 4823 of 2009]  CIVIL APPEAL NO.9949 OF 2010 [@ SLP(C) NO. 4824 of 2009]  CIVIL APPEAL NO.9950 OF 2010 [@ SLP(C) NO. 4825 of 2009]  CIVIL APPEAL  NO.9951 OF 2010   [@ SLP(C)  NO. 4826 of 2009]

O R D E R

Leave granted.    

2.    These appeals relate to acquisition of lands in six  

villages  namely,  Dakachya,  Peerkaradia,  Raukhedi,  Budhi  

Barlai,  Arjun  Badoda  and  Alipur,  for  the  purpose  of  the  

Indore  Dewas Four  Lane Road.  Acquisition proceedings  were  

initiated  under  preliminary  notification  dated  16.6.1989  

followed by other notifications dated 25.6.1989, 2.12.1989  

and 22.12.1989 in respect of an area of 47.647 hectares.  

3. It  is  stated  that  the  Land  Acquisition  Officer,  by  

several  awards,  offered  compensation  of  Rs.79,500/-  per  

hectare for irrigated lands, Rs.53,000/- per hectare for non-

irrigated  lands  and  Rs.40,000/-  per  hectare  for  padat  

(barren) land. On reference, compensation was determined at  

the  following  rates  by  the  Reference  Court  under  several  

judgments:

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Name of village Rate per hectare

Peerkaradia Rs.3,45,800/- (Category I) Rs.1,50,000/- (Category II)

Budhi Barlai Rs.1,14,000/-

Dakachaya Rs.1,50,000/-

Raukhedi Rs.1,60,550/-

Arjun Badoda Rs.1,23,500/-

Alipur Rs.75,000/-

4. Feeling aggrieved, the land owners filed appeals before  

the High Court. It is stated that the land-owners in their  

appeals,  filed applications for amendment of their claims  

and the High Court allowed the applications and permitting  

them to increase their claims from around Rs.4 lakhs per  

hectare to Rs.6.17 lakhs per hectare. The High Court, by the  

impugned  common  judgment  dated  26.2.2008,   allowed  the  

appeals by the land-owners and increased the compensation to  

Rupees  Six  Lakhs  per  hectare  uniformly  for  the  acquiring  

lands  in  all  these  villages.  The  said  judgment  is  under  

challenge in these appeals by special leave.

5. The  High  Court  held  that  the  acquired  lands  though  

situated in six villages, were contiguous to each other and  

were  all  in   one   area   of   Indore   District; that the  

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acquisitions were all for the same public purpose; and that  

therefore the same rate of compensation ought to be awarded  

for all the acquired lands. The High Court determined the  

market value in regard to all acquired lands in six villages  

with reference to a sale deed dated 9.3.1989 (marked as Ex.  

P2 = D1) relating to 1506 sq.ft. of land for Rs.10,000/- in  

the village Budhi Barlai. The High Court worked out the rate  

per  acre  from  the  said  sale  deed  as  Rs.7,14,285/-  per  

hectare. The High Court made a deduction of Rs.1,14,285/-  

per hectare as the plot sold was a small bit and arrived at  

the lump sum figure of Rupees Six Lakhs per hectare as the  

market value.

6. On a perusal of the judgment of the High Court, we find  

the following glaring infirmities:

(i) The lands acquired were situated in different villages.  

They did not form a contiguous compact block. On the other  

hand, the acquired lands were situated one after another, as  

the acquisitions were for laying a road. The lands acquired  

formed  a  thin  strip  spread  over  several  villages.  As  a  

result, the lands acquired in the village at one end and the  

lands acquired in another village at the other end, were far  

away  from  each  other  and  could  not  be  considered  as  

contiguous lands with the same value. This is evident from  

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the  judgments  of  the  Reference  Court  which  awarded  

compensation at rates ranging from as little as Rs.75,000/-  

per  hectare  to  Rs.3,45,800/-  per  hectare,  depending  upon  

their  respective market value. There was no evidence that  

all the acquired lands were similarly situated or of similar  

value or had similar potential for development. Though the  

acquisitions   related  to  six  villages  and  though  the  

Reference Court had determined different market values for  

lands  in  different  villages,  the  High  Court,  without  any  

acceptable or valid reason, has determined a uniform high  

rate of Rupees Six Lakhs per hectare. The market value with  

reference to Ex.P2 even if acceptable can obviously apply  

only  to  the  nearby  lands  in  that  village  and  cannot  be  

applied to six villages.

(ii) Most of  the acquired lands were agricultural lands.  

Some lands were small plots with structures. The High Court  

has treated both agricultural lands and the non-agricultural  

plots with structures on the same footing and awarded the  

same  compensation  to  all  the  acquired  lands  which  is  

obviously erroneous.  

(iii) The High Court has awarded compensation at a uniform  

rate of Rupees six lakhs per hectare based on a single sale  

transaction dated 9.3.1989 relating to a residential plot of  

1506 sq. feet which was sold for Rs.10,000/- (which  works  

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out to Rs.7,14,285/- per hectare). It is now well settled  

that if the sale deed relating to a small developed plot of  

land is to be the basis for determining the market value of  

large undeveloped areas, appropriate deductions will have to  

be made towards development cost which may vary from 20% to  

75% of the price of the developed plot (that is upto 40% of  

the  land area for roads, drains, parks, civic amenities  

etc., and upto 35% towards the actual cost of development).  

The  percentage of deduction will depend upon the situation  

of the lands, the nature of development, etc. (See Lal Chand  

v.  Union of India – 2009 (15) SCC 769 at paras 13 to 22).  

The  court cannot arbitrarily deduct a small lump sum from  

the value of a small developed plot, to arrive at the value  

of an undeveloped rural lands. The deduction that is made by  

the High  Court is hardly 15% to 16% of the value of the  

small developed plot. Having regard to the situation of the  

lands   in   question   and   other  circumstances,   it  

would appear that the deduction should be in the range of  

about 40% to 50% from the value of the small and developed  

plot. Of course, the above percentage and the percentage of  

deduction require to be determined after  consideration of  

the relevant evidence. The High Court  has not even referred  

to  this  aspect  nor  has  it  made  an  appropriate  deduction  

towards the development.  

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(iv) Most of the land owners had claimed only about Rupees  

Four  Lakhs  per  hectare  (except  some  land  owners  in  Peer  

Karadia and Rau Khedi who appear to have claimed Rupees Five  

Lakhs  per hectare). They were permitted to amend the claim  

to  Rs.6,17,000/-   without  proper  consideration  of  the  

question as to such amendment was warranted.

(v) The parties had exhibited sale deeds relating to Peer  

Karadia and Dakachya.  The appellants had also relied upon  

two sale deeds relating to sale of one acre of land each in  

Budhi Barlai (Ex D4 and  D5 dated 14.12.1989) showing that  

the market value was only  around Rs.38000/- to Rs.42000/-  

per acre. These were not considered though referred by the  

High Court.

7. We are therefore of the view that the judgment of the  

High  Court  cannot  be  sustained.  In  the  absence  of  any  

classification with reference to villages, nature of lands,  

and consideration of evidence with reference to the lands in  

each village, the common judgment of the High Court awarding  

a uniform high rate cannot be sustained.

8. We,  therefore,  allow  these   appeals,  set  aside  the  

common judgment dated 26.2.2008 of the Madhya Pradesh High  

Court under challenge in these appeals and remand the matter  

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to  the  High  Court  for  assessment  of  the  market  value  in  

accordance with law keeping in view the above observations.  

We hereby make it clear that nothing stated above shall be  

construed as expression of any final opinion in regard  to  

the  actual  market  value  and  the  High  Court  will  have  to  

assess the same with reference to the evidence.

  ......................J.          ( R.V. RAVEENDRAN )

New Delhi;           ......................J. November 23, 2010.          ( A.K. PATNAIK )

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